Tuesday, January 12, 2010

Council Prepares to Gamble $3.5 Million on Trolley

It's a familiar pattern. The problem gambler talks big about all the wonderful things his next win will bring. Don't mention his long string of losses, he lives in total denial of them. In his mind past performance and statistics are for mathematicians. The gambler's got a good feeling about this one, and just needs to scare up the money. He's already blown his cash and cut expenses, even some necessities. Then it hits him...he can sell the inheritence. The family won't like it, but think how rich they'll be after his next big win. But it never comes, wealth is squandered, and the family disintegrates in the self-destructive cycle.

City leaders talk a big line about all the extra people and money a streetcar will bring. Forget about the hundreds of millions of lost tax dollars that were wasted on the:

Infamous Cincinnati Subway

Riverfront Transit Center

Union Terminal (until the County took it over)

National Underground Railroad Freedom Center

Expansion of the Convention Center

Demolition of 5th & Race tower for a Nordstrom that never materialized

Elimination of the 2nd Street entertainment district for a

Pair of stadiums facing insolvency.

Council has a scientific study which says the trolley will make it all better again. Just like the studies they had for all the other failed projects. Besides, Mayor Mallory has a really good feeling about this trolley bet. Now if he can only scrounge up the money.

The City's rainy day fund has been depleted. Social services were whacked. And we've gone into hock to maintain vital public safety services while cutting important maintenance and operations staff. But we're still not meeting our bills. We're a few billion dollars away from having a legal sewer system, and the City retirement fund is on the brink of insolvency too. We're indulging in luxuries while short-changing necessities.

True to form, Mallory, Dohoney & council sold off city assets, including part of one of our airports, and all our street lights to continue their binge. We just recently bought the street lights back on the Smale Commission's recommendation, and have had 2 municipal airports since soon after the Wright Brothers' 1st flight. Voter approval is the only thing standing in the way of them selling off the Water Works and Cincinnati Southern Railroad.

City administrators say the $3.5 million would pay for preliminary design and environmental work to position the city for federal funds. But it's essentially just a bet on the hope of a later payoff.

So what happens if we spend the $3.5 million and get nothing from the Feds? That would be a good question for you to ask a council member. The same officials say the streetcar is dead unless we win at least $60 million from the Feds. Like all unsuccessful bets, this wager would be completely wasted.

Tell Council and the Mayor they shouldn't be gambling with our butter and egg money. If they ever get the city on a solid fiscal footing, then we can talk trolleys.

I'm not sure who you mean when you refer to the gambler. You list the following "failures" (though we can debate just how poor those choices were, and who is to blame if you'd like): Infamous Cincinnati SubwayRiverfront Transit CenterUnion Terminal (until the County took it over)National Underground Railroad Freedom CenterExpansion of the Convention CenterDemolition of 5th & Race tower for a Nordstrom that never materializedElimination of the 2nd Street entertainment district for a Pair of stadiums facing insolvancy

Bus is there anyone in a position of power right now that had anything to do with any of those events? You can't blame shortcomings on an institution, for it is individuals (you are still all for individual responsibility, aren't you?) who make up institutions.

So, which INDIVIDUAL, if any, is a common denominator between all of these "failures?"

Elimination of the 2nd Street entertainment district for a Pair of stadiums facing insolvancy:Bengal Jeff Berding, Todd Portune, Roxanne Qualls, the Cincinnati Chamber of Commerce, the Universoty of Cincinnati Economic Development Department

David,Who's the gambler? Based on your total denial, it would have to be you. You are among those advocating this bet as a good move, aren't you? City leaders act to please constituencies; in this case, you and those like you.

Later on, after $3.5 million is wasted designing a trolley that will never be built, and the city sinks further into financial ruin, you might wonder where all our money went. That's not likely though. Gamblers like you usually just bounce to the next bet.

So what will it be? RFID recycle bins? Kindles? Yet another $100 million riverfront park? The pattern tells us it will come with the promise of huge paybacks that will be impossible to measure. And all the things that sustain the day-to-day survival of the city will fall haphazardly by the wayside, as you try to reel in the whale.

When the money runs out, you'll vote to sell the Water Works, or the railroad. Anything to delay the day of reckoning when bills must be paid. Because that's what problem gamblers do.

The pattern is obvious, repeatable, and not unique to any individual. That's how it has come to persist for over 100 years.

So how about it David? When the Federal Judge orders us to waste-lay most non-essential City services in order to pay our pension obligations, will we break the spending addiction then? Most addicts don't get help until they're ordered to.

The decision to build the Cincinnati Streetcar is not based on a hunch or a good feeling, but rather sound economic studies that have been verified by more than one source.

The economic benefits have been proven, environmental benefits have been proven, and the transportation benefits have been proven. But why bother with studies conducted by credible firms that have been verified by an academic institution when you can just say the heck with it all.

You are basically saying that the firm who conducted the study was paid off and the university worked their magic and didn't follow ethical proceedings with their study. To me that sounds crazier than anything else involved with this project.

Where is the scorecard for HDR Decision Economics? How accurate (numerically) have their predictions been? Have they ever done a streetcar feasibility study that recommended against streetcar implementation? Why not? Could it be their inherent conflict as a Design/Build/Maintain/Operate team member makes such a conclusion impossible?

UC's track record is public, lengthy, and terrible. Every single boondoggle in town began with a UC study touting it as the greatest thing since sliced bread. Reality has been stale or moldy bread.

This is the evidence you expect us to swallow?

The streetcar is a huge departure from longstanding policy, and it isn't at all clear that there will be any payback at all. And if there are benefits, it's not at all obvious that they will be worth the enormous cost.

You routinely quote payback figures as gospel, not as estimates, or more accurately, hoped-for targets. If HDR shares your certainty, let them wager their fees against the promised payback. If it exceeds expectations, they could double or triple their profits.

Cincinnatians are tired of being promised huge gains from economic development projects only to have them show negative returns. It's time for somebody other than taxpayers to take the risk. And the funds wagered must not include those needed for our city's survival.

Very interesting article regarding the city's sale of the street lighting to Duke. Money is earmarked for streetcar plan (heard that on WVXU this a.m.) and no question Duke stands to gain should an electric street car system operate, but interestingly, the proposed sale saves the city an estimated $500,000 each year over ten years ($5M). That sounds like, if my math is right, we net a gain of $1M just on that.

The Channel 9 report is wrong. Now that Duke owns the lights, Cincinati has to pay Duke a half million a year for the use of them. Cincinnati has basically increased their operating costs forever in exchange for a little bit of cash now.

In the late 90's Cincinnati rented streetlights from Duke (then Cinergy) like most cities do. The Smale Commission did a comprehensive review of our infrastructure needs, and pegged that as a savings opportunity. Unlike little towns, Cincinnati already has the long-reach boom trucks and high voltage electricians necessary to maintain streetlights. So we bought them from Cinergy and dropped our annual costs for streetlighting dramatically.

By undoing that, our feckless leaders have driven the operating budget further into the red in an effort to generate capital funds to waste on the trolley.

This is one example of how they canibalize the operating budget (which pays for cops, pools, clinics, etc) and transfer those dollars to the capital budget.

Anytime you hear them say "trolley dollars can't help us keep police," or "we don't have a deficit in the capital budget," just remember it's not that they "can't" it's that they won't.

I agree with COAST. Clearly the Smale Commission study which stated that the city should buy the streetlights was right... but the UC study on the Streetcar is all wrong! I mean, come on! The Smale Commission is obviously much more credible than some "university".

The UC Economic Development Department is NEVER wrong. Except when they were dead on balls incorrect when they told us that the Stadium Sales Tax increase and subsequent Stadium construction would be a great economic boon to Hamilton County. Pay no attention to the fact that their study was completely false and the stadiums are now bankrupting the County. Their past failures don't help our argument and need to be completely ignored!!! Not only does it point to a weakness in our argument, but it really, really hurts Travis' feelings

At this stage in the game we, as taxpayers, should all be directing our representatives to cut all spending to the bare bones essentials. We are running deficits and have to take out loans to pay our bills. We are effectively living on credit cards as a city (albeit really low interest rate cards).

No new projects should be happening until after we see our tax revenue come back up to supportable levels and we have replenished the savings we burned through. Then we can talk about new projects, whether they be streetcars, a subway, or a monorail. But trying to spend money on non-essentials right now just shows I can't trust my city officials to make responsible financial decisions. So you can be certain I won't trust the opinion of any city official who right now thinks the city should embark on building a streetcar system when facing the financial crunch we're in right now.

I agree, Michael, that some spending needs to be cut. That is one piece of a larger solution. In addition to reducing our outlays, we need to increase revenue. But because all the right-wingers in the region would go absolutely insane if anybody attempts to mutter the 't' word, that's not a politically viable solution. Nor is it entirely necessary, for that matter. As such, the city must look to another ways of increasing revenue, such as through direct public investment that will stimulate growth of the local economy. As the economic activity increases, tax revenue generated increases without raising the tax rate, a la Keynes.

If you have any suggestions on how to increase revenue without raising taxes to the magnitude that the streetcar will, I am all ears, as I'm sure City Hall is as well. But your blanket statement that we need to just cut everything offers little practical input to the conversation.

It is really interesting that most free market, low tax people say cut, cut, cut for anything public. Ask them what leads to growth though and they answer: capital. If you want people to live in your city you can't cut your way to prosperity. People want good schools and good transportation alternatives. These are things that private industry doesn't care about, but will draw people, create jobs, and raise tax revenue base. COAST should know you have to invest money to make a return.

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